Stock performance since 9/11

This weekend marks 10 years since 9/11. Sad event that changed many people’s lives. The folks from Bespoke Invest have an overview of the performance of different asset classes for the past 10 years. After 2 great recessions and 2 powerful bull markets, a lot has changed: Gold went up almost 6 times, crude oil more than tripled, the S & P 500 gained a measly 10%, the U.S. dollar lost 1/3 of its value, the 10-year yield went from 5% to 2%. Who would have thought that after increasing its obligations by trillions of dollars, the U.S. government would be able to borrow so much cheaper?

But enough about the macro picture. 6 of the 20 best performing stocks for the past 10 years are in the current edition of St50, which only comes to show that some trends can last for years ($HANS, $GMCR, $AAPL, $QSII, $AMZN, $QCOR). You just have to find a way to monetize them.

For the week, the St50 momentum index managed to gain 1.04%, outperforming the S & P 500 by 265 basis points and the Nasdaq Composite by 123bp. The biggest winners include the biotech$VRUS, which is rumored to be acquired; the gold miner $RIC which gained almost 40% for the past 3 weeks on the St50; the oil company $EVEP and the grocery store $SUSS.

On the negative side, MCD slumped 4% after announcing only 3.2% growth in same store sales, which was below the expectations. $ABV fell 6%. I guess even beer stocks are not immune against market downtrends. The biggest loser on the list was the diversified machinery stock $CVV, which went from breaking out to new all-time high on Tuesday to dropping 8% for the week.

Let’s repeat what we have been saying to more than a month now. The market averages are still in a downtrend. Any breakout should be looked with suspicion as it is likely to fail. There are still setups on the long side that work, but their returns are smaller than usual and you have to be very nimble and lock profits when you have them.

What to expect for next week. Europe is bracing for a credit event. Greek bonds have been essentially priced for default and the equity markets are finally realizing that it might actually happen sooner than expected. When the fear of losing the principle prevails, everything is for sale. Retail traders go to cash. Institutions buy Treasuries as the closest substitute for cash.

I sense panic in the air and when there is panic, no stock is too cheap. One thing is sure. There will be a lot of volatility next week, which will bring many opportunities to make or lose money in sizable way. One friendly advice – if you are buying because of valuation, you better have deep pocket and a lot of patience; and don’t do it on margin.